[Aditya]

Honda Motorcycle and Scooter India held the foundation stone laying ceremony for a new manufacturing facility in Gujarat. Located at Vithlapur in Ahmedabad district at a distance of approximately 80 km from Ahmedabad city, it will be the company's fourth plant in India.

Spread across 250 acres, this plant will be operational by the end of 2015 and will be the world's largest scooter-only manufacturing facility with an annual production capacity of 1.2 million units. Honda already has three functional plants in the country. The addition of this new plant will take company's total annual production capacity in India to 5.8 million units. The new plant will employ approximately 3000 people within first 2 years of commercial production and will entail and investment of Rs. 1,100 crore.

India is the world's largest two-wheeler market. In the current fiscal, Honda aims to sell 18.2 million two-wheelers worldwide. India will contribute almost 25% to its global sales. The Indian automatic scooter market is growing at 2.5 times the speed of the overall two-wheeler industry. Honda expects this segment to go up to 35% of the overall two-wheeler sales in the next 5-10 years. With the new plant, Honda expects to be able to cope better with the rising demand for scooters.

[directinjection]

The question is how many scooters will they export from India? Being attracted by the Indian market is fine but they should also earn some foreign exchange for the country. At the very least, their exports should match the dividend and royalties they repatriate to Japan.